Ramco Beirut Residential Price Index shows 1,2% drop in 2015

For the second consecutive year, real estate advisory firm RAMCO has just released its RAMCO Residential Price Index of Beirut. According to the latest RAMCO Price Index, the price of apartments under construction in Beirut has dropped by 1.2% in 2015.

The study tracks the evolution of asking sales prices on the first floor (as posted by developers) during 2015. The study covers 248 residential buildings under construction in 61 neighborhoods across Municipal Beirut.

The study is based on asking prices posted by developers, and does not take into consideration any negotiation margins or discounts that may later apply.

“This index, published by our Research Department, confirms the downward trend of the real estate market in Beirut that has been in a slowdown phase within a difficult economic, political, and security context. For the second consecutive year, posted asking sales prices are dropping. In 2014, the drop stood at 0.7%; in 2015, the drop is of 1.2%. Nevertheless, the drop remains insignificant,” says Raja Makarem, Founder and Managing Director of RAMCO.

Seventy-four (74) developers, representing 29.8% of the projects covered by the study, have adjusted their prices downward. This is 9% more than in 2014. In 44% of the cases, price drops are lower than 5%. Sixteen (16) of the total 248 projects identified by the study have offered a reduction on prices that vary between 10% and 20%.

“By dropping their prices, developers seek to become more attractive to potential buyers and to break away from a lethargic market, in which new and unsold apartments are on the rise,” says Raja Makarem.

Conversely, 13.3% of the projects listed in the study have increased their asking sales prices.

However, the vast majority of projects under construction (56.9%) have maintained their pricing grids unchanged during the past year. This figure proves that it is still difficult for developers to openly announce a drop in their prices. They prefer to post the same asking sales prices as in 2014 and wait for a serious buyer. It is only if client interest is judged serious that the developer may become really flexible and be willing to negotiate their prices down.